Over 400 Israelis from the tech industry have signed onto a letter addressed to Prime Minister-designate Benjamin Netanyahu warning him that his coalition’s desired policies will harm the sector and drive away foreign investment.
Netanyahu’s bloc plans to curtail the judiciary, make changes to quasi-constitutional Basic Laws and grant sweeping powers in the West Bank to far-right lawmakers. A far-right party leader with an anti-LGBTQ agenda has also been granted authority over some education programs.
“We, entrepreneurs and founders of start-up companies in Israel, investors and managers of venture capital funds, appeal to you out of concern for the devastating consequences for the economy in general, and the high-tech industry in particular, that may result from the legislative processes taking place in the Knesset,” the letter to Netanyahu said.
“As citizens, we respect the results of the last election that reflect the will of the people and believe that you, as prime minister, will act for the benefit of Israeli society,” it said. “That being said, damage to the status of the judiciary and harm to the rights of minorities based on religion, race, gender or sexual identity — will be a real existential threat to the great high tech industry.”
The letter highlighted the billions of dollars invested annually in the tech sector from foreign investors, mostly from the US and Europe.
“Undermining confidence in the Israeli judicial system and as a result in Israeli democracy, and legislation that puts a question mark on the basic and fundamental rights of every person, regardless of who they are, may deter the investors who have driven the growth of this great industry,” the letter said.
The tech sector accounts for around 25% of Israel’s total income tax revenue and constitutes about 10% of the workforce, Channel 12 reported.
The lead signatory on the letter was Erez Shachar, co-founder of Qumra Capital. Other signatories included leaders of tech companies and investment firms including Mellanox, Pitango, monday.com, Yotpo and Fireblocks.
The tech sector is already under pressure due to global economic trends, with Intel, the country’s largest private sector high-tech employer, cutting back its workforce in recent weeks.
The Kan public broadcaster reported that 3,000 high-tech employees were fired in the first three months of the year, and Channel 12 said that an additional 2,800 workers were fired in June and July.
Netanyahu’s incoming coalition consists of his Likud party, two ultra-Orthodox factions and three far-right parties. The bloc has been pushing through the Knesset contentious legislation set down as a political pre-condition for finalizing the hardline government ahead of Netanyahu’s deadline for declaring a coalition next week.
The planned legislation includes a High Court override clause that will curtail the judiciary by allowing the Knesset to re-legislate laws that are struck down by the High Court.
Members of the incoming coalition have vowed to pass the override clause, and also to give the governing coalition of the day control over the panel that selects justices. The planned legislation, demanded by the Religious Zionism and United Torah Judaism parties as well as numerous Likud MKs, would likely allow the Knesset to re-legislate any such law or enact legislation with immunity from court review from the outset.
The proposed judicial changes — particularly the override clause — have been denounced by Netanyahu’s political rivals and prominent legal figures as destructive to Israel’s democratic system, leaving the parliamentary majority of the day with no brakes on its power.
The bloc has this week been pushing through legislation demanded by Likud’s far-right and ultra-Orthodox partners that will clear a path for a party leader serving a suspended sentence — Shas’s Aryeh Deri — to helm three ministries, and will enable a member of Religious Zionism, likely party leader Bezalel Smotrich, to become an independent minister in the Defense Ministry in control of West Bank building.
Other bills in the pipeline will expand the authority of the national security minister, set to be Otzma Yehudit head Itamar Ben Gvir, over the police force, and another will make it harder for rebel MKs to peel off from their parliamentary factions without sanction.
The likely incoming coalition wants the bills to pass into law before the government is sworn in, with Netanyahu having until December 21 to declare he has cobbled together a coalition and a week after that to get the coalition approved by the Knesset.
Netanyahu and his Haredi and far-right partners won 64 of the 120 Knesset seats in the November 1 elections. Netanyahu has been working since then to finalize agreements with his Likud party’s partners.